Retirement Planning Starts at Age Zero
Preparing 4 Tomorrow is more than emergency/disaster Planning or a clever slogan. It's a way of life that affects nearly everything I do. If you are anywhere near my age, you may have, or will, repeat this phrase many times; "if I had known, in my youth, what I know now, I would have __________." My main fill-in-the-blank answer is "learned financial responsibility and started saving for retirement earlier."
Think about this, parents; I really wish my parents had thrown a few bucks into a savings account when I was first born and just left it alone or, maybe, added a few more bucks to it now and then (maybe on all my birthdays). Not only would I have the start of a financially sound future but, I believe, would have grown up with a better financial vision of proper saving, spending and retirement. What happened is completely different. I want to be clear that I loved my parents (who are now gone from this Earth). But I don't ever recall them mentioning any kind of money management. I learned "what I know now" on my own and started very late. Further, I learned some very bad spending habits that affect me to this day. All that said, I need to accept responsibility for myself and not blame anyone else. Parents should help their children by educating themselves first, and then their children, on good money management and retirement planning. This will go much farther in helping them than any formal education.
I've learned some serious lessons and tried to pass on to my younger friends and family members. They look at me when I speak to them and gesture that they're getting it and even say "I need to do that". One even sent me an email with a link to an article about early retirement planning with the comment "Now's one of those times where you can say "See, I told you so"". As I was typing this Post, he sent me an Email telling that he will be contributing to a retirement account through his new job. Looks like my words haven't fallen entirely on deaf ears.
I am truly concerned about today's youth and their retirement future. I'm fairly sure my young friends think I was born old. I wasn't. I use to be them. I use to think the way they think. My retirement has been negatively affected because I use to think the way they think. It's also my reason for this Post. I've said this many times to them; "I have nothing to gain by sharing this with you". The distractions and short-sightedness of youth will be their undoing. Take it from one of the undone. It's too bad that we, in our earlier years, don't really listen and learn from our elders. It prevents so much grief and gives more time for other worthwhile pursuits.
The primary excuse I hear is "I don't have the money right now; I need it for other things." Do they have money:
- to party this weekend?
- for that fancy pair of shoes or shirt/top or skinny jeans?
- for glow lights under their car or a new chick magnet car or 4 wheel covers that match?
- for an unlimited everything cell phone plan?
- for cigarettes (ouch - and the medical bills smoking damage will eventually produce)?
- to impress others
When priorities are established, the money will always find its way to them. And so it can with saving money too.
Along with the distractions of their youth, I believe they don't get it because they have, generally, grown up in an affluent society . . . they feel they will make tons of money and it will always be like this; they can spend what they please, take out loans, pay with the credit card and deal with the bills later. Destructive thinking! I believe that Social Security will end with my generation and the only retirement plan, future generations will have, is what they do for themselves starting now.
For those I have not spoken to, and a reminder to those I have, here is my advice and warnings:
- Develop a Future Vision of yourself (the odds are you will live much longer than you think)
- START NOW (whatever the amount)
- add to it as often as possible
- don't let your spending exceed your income
- budget your money (with retirement savings included)
- don't pull money from a retirement account until you are retirement age.
- diversify* your savings (different vehicles and institutions)
- avoid any kind of debt at all cost
- don't use a credit card unless you can pay off the balance on every monthly statement
- don't spend more than necessary on things that don't grow in value (like vehicles, clothes and accessories, cell phones, furniture, etc.)
* Diversification: You know what? The Bible never gets old. It has something to say about everything; even diversification: "Give a portion to seven, and also to eight; for you know not what evil shall be on the earth." (Ecclesiastes 11:2). The old adage "don't put all of your eggs in one basket" is true. Something is sure to fail and you should have several backups. As an example, this is what I have done that may, or may not, work for others. In addition to my standard Checking and Savings accounts, these are the "vehicles" where my savings are placed:
- Real Estate
- Certificates of Deposit
- Precious Metals and Stones (gold, silver, diamonds, etc.)
- Stock Market
- Roth IRA
- I am now researching an Insurance Annuity paid on a set retirement age
I am no financial guru, or I would also be independently wealthy, so I highly recommend finding someone to consult about sound financial planning. At the very least, take a look at the financial advice of Suze Orman. There is plenty of free stuff on the web with her financial tips and PBS occasionally televises her programs. She's a no-nonsense, in-your-face, tell-it-like-it-is person who used to wait on tables in a diner and lived out of her car.
The best advice that I can give in this whole Post is GET TO IT NOW! Tomorrow will come too soon and be too late.
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NOTE: No kind of financial advice is being offered here. This information is being presented for informational purposes only and should NOT be interpreted as a recommendation for a specific plan, product, or course of action. It is presented to help make better financial decisions with the participation of a licensed professional, if desired. These techniques have worked for many others and is presented in the spirit of education and sharing. You are solely responsible for your own actions on how you use this information.